Buying a house off-plan

dhokes

When is the deposit usually paid when purchasing a new house off-plan? For example, I'm looking to pay a deposit of 10% and the reservation fee is £250. The house is due to be finished next year. If I were to pay the reservation fee today, when do people usually pay the 10% deposit?

Purchasing 'off-plan', in theory can the builders place things like the power sockets/tv socket wherever they like? Is it possible/common to have a say in such things?

When it comes to reserving a property, if the developer agrees to pay the stamp duty and/or include extras in the purchase price e.g. carpets/outside lights, how is this legally binding? Does this need to be on paper before I pay the reservation fee and/or processed via. a solicitor?

comeandgo

You should have drawings/ plans of the house and will be able to see where the electrical sockets will be. We were able to ask for more sockets and bt connections in the room that was to be an office. We only had a reservation fee of £2000 to pay on our new build, no deposits.

dhokes

comeandgo wrote: »

You should have drawings/ plans of the house and will be able to see where the electrical sockets will be. We were able to ask for more sockets and bt connections in the room that was to be an office. We only had a reservation fee of £2000 to pay on our new build, no deposits.

So you completely funded the purchase with a mortgage and no cash deposit?

comeandgo

No we had equity from the house we sold but the agreed price was paid just prior to us moving in, no deposit. The builder was a small builder who builds high quality houses and that was his way of doing it.

alex_163163

The 10% deposit will be paid on exchange day when the sale/ purchase becomes a legally binding contract.
Most new build developers ask for exchanging within 4-6 weeks of reservation and then completion will be 'on notice'.

Extra sockets will be available to add in but these will likely come at an additional cost e.g. £60 per extra double socket for example.

Any extras that the builders are including as incentives will need to be agreed at reservation and included on the reservation form.
You can still choose to add other extras on if you wish to pay for them yourselves and you will be invited into the site sales office to discuss these around the time you exchange usually.

DCFC79

Why not ask the developer about the plug sockets etc.

dhokes

Thanks for the reply. Much appreciated.

alex_163163 wrote: »

The 10% deposit will be paid on exchange day when the sale/ purchase becomes a legally binding contract.
Most new build developers ask for exchanging within 4-6 weeks of reservation and then completion will be 'on notice'.

What conditions, if any, would the 10% deposit be refundable?

Completion is simply receiving the keys and moving in, right?

alex_163163 wrote: »

Extra sockets will be available to add in but these will likely come at an additional cost e.g. £60 per extra double socket for example.

Is this usually done at reservation stage or when going through any extras I want, nearer the time of exchange?

For example, I want extra tiling in the bathroom on specific walls including in the purchase price so I was planning to negotiate on this prior to reservation. However, I don't mind paying for an extra socket so I was thinking that I should discuss this at the time of exchange. Does that sound reasonable?

alex_163163

Completion is the day when the rest of the monies get paid and the house is transferred into your ownership. So mortgage funds will be transferred to the developer etc. Keys won't be collectible until you receive a call from your solicitor to say all funds have transferred and the developer has released the keys.

Typically the deposit won't be refundable after exchange. I have heard on here of people negotiating a date whereby if the house is not ready then for completion the buyer can pull out penalty free. But a developer doesn't have to include this. New builds are notorious for being delayed so if you don't have a clause with a final date in it, then you can't just pull out because the house will be 3 weeks later than originally planned for instance. That is why it's 'on notice'. You will get 10 days notice of completion once everything is ready I believe.

Yes getting ruling included as an incentive would need to be negotiated in at reservation stage. But extra plug sockets would be done later. If this is before exchange developers will usually ask for a deposit of some amount for any extras you will be paying for in case you decide to pull out before exchange.
If it's after then they will probably ask for a smaller deposit as you are less likely to pull out!
When I was looking at a new build earlier this year, we had to pay a 10% deposit On our extras - spotlights, extra tv aerial sockets, plug sockets etc.

eddddy

dhokes wrote: »

What conditions, if any, would the 10% deposit be refundable?

Completion is simply receiving the keys and moving in, right?

When you pay your 10% deposit and exchange contracts, you are committed to buying the house. You could be sued for damages if you don't. (When property prices dipped a few years ago, a developer threatened to sue somebody I know for £90k, if they backed out of the purchase.)

Typically, the only way out is if the house is not ready by a 'long-stop' date - if one is mentioned in the contract.

So you should have your mortgage arranged before paying the deposit.

nubbins

TIP:Whatever they developers tell you the completion date is, add at least two months on.

SuboJvR

dhokes wrote: »

When is the deposit usually paid when purchasing a new house off-plan? For example, I'm looking to pay a deposit of 10% and the reservation fee is £250. The house is due to be finished next year. If I were to pay the reservation fee today, when do people usually pay the 10% deposit?

Purchasing 'off-plan', in theory can the builders place things like the power sockets/tv socket wherever they like? Is it possible/common to have a say in such things?

When it comes to reserving a property, if the developer agrees to pay the stamp duty and/or include extras in the purchase price e.g. carpets/outside lights, how is this legally binding? Does this need to be on paper before I pay the reservation fee and/or processed via. a solicitor?

Usually you pay deposit at exchange of contracts, this will be when you are committing to the purchase.

You will be able to determine where plug sockets etc go, yes, so long as it is sufficiently early in the build.

I would negotiate any extras prior to paying a reservation fee. Once you reserve a property a form will probably be filled out which lists your incentives. You may struggle to negotiate further once you've already agreed to go ahead.

So:

Discuss incentives. Try and get what you want. (They may give you an allowance for options, e.g. £5000 to spend on options, something like that). Check whether flooring is included.
Once you're happy, reserve property.
After reservation you can discuss the finer details e.g. of where things go, what tiles you want, kitchen cupboards etc. Be prepared that you may need to pay extra for extra sockets and such at this stage if you haven't already negotiated this kind of thing.
The "first fix" is going to be the electrical and plumbing stuff as this is in the walls. So they'll want decisions on this sooner. For a property that it already partially built you may be too late for this (for us, this stage was about three months before we expect to complete).
Next up they'll be ordering things like your tiles and kitchen units so you'll need to decide on those, etc.

Exchange may happen at any point during the above. It could be before you select your plug sockets, it could be after.

The deposit isn't refundable unless the builder fails to complete by a long-stop date. This isn't the initial completion window.

Completion will be on notice. 10-14 days' notice. Don't do anything regarding leaving existing property until you have that formal notice.